This is an exciting time to be an accredited investor in the medical marijuana/cannabis sector. Decriminalization is taking place around the world and that trend is gaining momentum. To be successful at investing, most sophisticated investors like to follow trends and get invested early while the trend is gaining momentum. Once you have maximum participation from the retail investing crowd, we can be assured the trend for that sector had pretty much peaked and will soon reverse.

While the last year has been an extreme rollercoaster ride for most investors in the cannabis market, we feel confident that this trend is still at the early stages, well-established and on an upward momentum. The rise and fall in stock prices in the last year was a result of hot money coming in and out of the sector, illiquid markets and tight share structures. But what we didn’t see during that time is the participation from the institutional and professional money crowd.

The Trend For Investing In The Marijuana Sector Is Now About To change.

Over the last six months, we have seen participation by professional money managers, the brokerage companies and accredited investors. These investors usually don’t buy stocks in the open like most retail investors do. Remember they are sophisticated when it comes to investing and they understand the best way to get invested in a longer trend, which is usually via private placements. The professional money managers know to get invested with the best companies at the earlier stages where financing is needed and they can acquire big blocks of shares via private placements and bought deals.

They usually stay invested for the longer haul with a 3 to 5 year horizon where they can maximize their profits and sell shares to the retail investor at the peak of the sector trend. Knowing their investment timeline and exit strategy can help the average investor piggy back on the professional’s strategy for investing within a larger trend. Since the professional money is now entering the market, we can be assured that the investment trend in the marijuana sector still has another 3 to 5 years to go. The trend for investing in the cannabis sector is gaining momentum, but we are still at the early stages and now is the best time to be an investor in this space as we still have tremendous upside over the next few years.

While most retail investors do not have access to private placement deals, there is an investor class that can benefit from the larger trend and get invested alongside the professional money managers, they are called Accredited Investors. This essentially means you have a net worth of over one million dollars or several hundred thousand dollars of income each year. To see if you qualify to get access to the best private placement deals in the marijuana industry, you can view the accredited investor guidelines for both US and Canadian residents.

If you qualify as an accredited investor, you should take the opportunity to evaluate these private placements while they are available during the early stages of financing required by these companies. The big fund managers are just starting to enter the marijuana industry, but at the moment many are reluctant to invest in private placements because of the lack of uncertainty around rules and regulation created by the U.S Federal Government. As the trend for legalization in many States continues to gain momentum, we can expect the US Federal Government to cave in and stop The War Against A Plant, especially since over 50% of the population thinks that marijuana use should be decriminalized.

Once the really big fund managers, who are still sitting on the sidelines, are given the green light to start investing in this sector, these early investors will benefit from the sectors growth and the share prices will rise from the additional buying pressure. Once that happens, the market caps will also rise to a point where the institutional fund managers will be in a position to start getting invested in the marijuana sector. At the moment, many of the institutional money can’t get invested in companies with a small market cap, but as the market caps start to rise, we can expect these fund managers will have to pay a higher premium for the industry leaders in the MJ space.

Finding The Right Private Placement Deal

At this moment in time, they key to investing in the MJ space is to identify several different companies which standout above the rest, get invested early enough (especially now that many of the company’s stock price have corrected) and then wait for the broker and institutional money to start aggressively buying the sector.

Accredited Investors in Canada and the United States have an amazing opportunity to get invested alongside some of the professionals who are early adaptors and visionaries; they see where the marijuana sector is heading and they are placing their bets on some potential leaders.

The trend for sector is already established and it is gaining momentum, over the next year or two we can expect to see some companies with great potential raise capital via private placements. As an accredited investor, you want to get positioned early enough in some of the best companies and ride the trend. Your strategy should be to identify the best MJ companies who are raising capital now, get invested and sell to the institutional money manager or the retail investor at the peak of the trend when excitement is at its maximum.

TDV Golden Trader has already identified several private placement opportunities for accredited investors to participate in and we are evaluating dozens more. We only select the best opportunities with private and public looking for financing and share them with our audience. If you qualify as an accredited investor and would like to get more details on the best deals, you may want to subscribe to our MJ Accredited Investor News letter.

The latest company we introduced accredited investors to was Organigram Inc., a licensed producer under Health Canada’s MMPR Marihuana for Medical Purposes Regulations. The company’s private placement opportunity was oversubscribed and is now closed. The company expects to be trading on the TSXV by the end of this month on Aug. 25th under the symbol OGI. Organigram Inc. was recently in the news. Here is the link.

Since the company already has a license and will be generating cash flow at the end of this month, we think it is de-risked in terms of an investment, which is why we were excited to get involved in bringing it to accredited investors.

While the opportunities and options for accredited investors to get involved is probably the best way to play the larger 3 to 5 year trend in the MJ space, the retail investor can also benefit from this trend and get invested at an early enough stage. I write a subscriber-based newsletter for TDV, which provides a general overview of the marijuana industry and provides coverage on some of the best companies in the space. We provide ideas for buy and hold, as well as trading strategies on many of the companies we feel have the best chance of success to become an industry leader. You can get more details and subscribe at TDV Golden Trader.

Remember, any investment does come with some risk. We are not professional financial advisors; please consult your financial advisor before making any investments decisions, including any of the marijuana related private placement investment opportunities presented on our site. Please read our full legal disclaimer before making any investment decisions on any of the companies we provide coverage on.

Cheers,

]]>http://tdvgoldentrader.com/blog/rss-comments-entry-34963297.xmlConfiscating Gold Is Not as Easy as Taking Cash in the BankTDV Golden TraderSun, 18 May 2014 18:31:35 +0000http://tdvgoldentrader.com/blog/2014/5/18/confiscating-gold-is-not-as-easy-as-taking-cash-in-the-bank.html1063751:12278810:34820923While investors in the precious metals sector had to endure a tough bear market in the past couple of years, there is a glimmer of golden light at the end of this dark tunnel. The fundamentals for gold ownership have not changed and remain as strong as ever, and that's why our special report Getting Your Gold Out Of Dodge (GYGOOD) comes highly recommended. Over two years ago, I started researching and writing this report with The Dollar Vigilante team. It is a complete compendium on how to internationalize your precious metal's holdings and move them out of the western financial system.

The reasons are clear on why we encourage moving your gold out of the financial system. There is a high degree of risk that desperate governments will take what they can, whenever they can, because... THEY CAN.

The highest risk to your gold holdings is not so much the price of gold but making sure it cannot be easily confiscated and taken from you like money in a bank account could be. We all have heard about the potential for money held in banks to be bailed in the next time the banking system goes into meltdown mode. But there is a new threat to your money held at banks and it comes from your very own government regardless of another financial meltdown.

As governments around the world become more desperate for higher tax revenues, they will empower themselves and increase their ability to confiscate your assets if they deem it necessary to do so, this includes money held in your bank account.

For example last week in the UK, the Common’s Treasury committee raised concerns about the potential powers that could be given to HM Revenue and Customs (HMRC) to confiscate cash from bank accounts without a court order. MP’s warned that innocent people face having money taken from their bank accounts by the taxman.

The committee recognizes the fact that there could be an “abuse” of power and that taxpayers could suffer “serious detriment” for no wrong doing if officials are able to take money directly from bank accounts. At the moment, tax officials can only remove money from your bank account when a person has failed to act on four formal warnings requiring payment and only after gaining permission from a magistrate or judge. The concerns revolve around how taxes are calculated and the security of the information gathered. Andrew Tyrie, who is the Conservative chairman of the Treasury committee doesn’t even trust the tax officials to be accurate. “People should pay the right amount of tax. But HMRC does not always ask for the right amount,” Mr Tyrie said.

MP’s who are reviewing the latest budget report say: "The ability directly to have access to millions of taxpayers’ bank accounts raises concerns about the risk of fraud and error."

“This policy is highly dependent on HMRC’s ability accurately to determine which taxpayers owe money and what amounts they owe, an ability not always demonstrated in the past. Incorrectly collecting money will result in serious detriment to taxpayers.”

This new tax power is due to be put into place next year and if it passes, the long reaching arm of the tax man will surely grab any money it can from your back account, legitimately or by error. When the government runs low on funds, which is a mathematical certainty, it will take the low hanging fruit of money held in bank accounts. Of course the justification for these changes is to get HMRC in line with other government agencies to access money held at the bank for people who have funds available and are not current with tax payments.

We see this as a growing trend, where desperate federal tax departments will be given carte blanche to access and take your money with very little recourse if you are deemed to owe them money. Of course once the precedence is set by one gov’t agency, then the potential exists for these powers to be extended to all government agencies in the future.

The good news is that people still have the option to store financial assets like gold outside the banking system which is not easily accessible by government officials as they get more desperate in the coming years. This is one of many reasons why you should continuously buy precious metals and store them safely away and out of the reach from easy confiscation. It’s a hard asset which is not easily taken from you if hidden or stored in private vaults, unlike digital money held in a bank which is easily confiscated by indebted government (Janet Yellen admits the federal governments deficits will rise to unsustainable levels) or the bankrupt banking system by way of bail-ins.

]]>http://tdvgoldentrader.com/blog/rss-comments-entry-34820923.xmlWelcome to 2014, a New Year of Rules, Regulations, Taxes, Corruption and TheftTDV Golden TraderThu, 02 Jan 2014 20:45:48 +0000http://tdvgoldentrader.com/blog/2014/1/2/welcome-to-2014-a-new-year-of-rules-regulations-taxes-corrup.html1063751:12278810:34538428As everyone rings in the New Year with a toast and a cheer for a prosperous 2014, Wall Street started celebrating many months ago and is ringing in the New Year with a glass of Dom Pérignon. They surely have a reason to celebrate as 2013 brought them good fortune and financial prosperity, having rung in the New Year with new all time highs on many of the US-based major indexes.

While there are many ways to measure prosperity, for Wall Street it’s all about profits and the bottom line. They only know one thing, how much wealth they can steal from others by “gaming” the system. I say “steal” because today’s markets are no longer about valuations and true price discovery. It’s more about computer algorithms, access to unlimited funds, having insider knowledge on buy and sell orders, front running the average investor and the ability to extract risk free profits by gaming the system. Of course this is nothing new for big Wall Street investment houses; over the last decade they have mastered the art of investing by gaming the system and extracting wealth from others.

Financial prosperity in today’s world means having the Federal Reserve central bank in your corner ready to bail you out in case any of your bets go bad. Becoming “Too Big to Fail” is a necessity to financial survival and having the regulators in your pocket also helps. Of course, we can’t forget about using extreme leverage, derivatives, credit default swaps and futures to squeeze some additional profits from the system.

With all these tools and means to game the system, investment banking for profit becomes a game of how much wealth you can steal from others before you get caught with your hand in the cookie jar. Of course when you do get caught, all you get is a slap on the wrist in terms of fines and penalties. If you get caught laundering money, rigging interest and foreign exchange rates — no problem, there is a fine for that, as long as you are one of the “Too Big to Fail” banks.

Today’s financial system is setup to steal your wealth. The bankers steal from you by rigging the system for their gain, and then the government fines the bankers for stealing. In order to maintain banking control and growth, the bankers have to resort to rigging the game even more so they maintain profit growth. This corrupt system of theft is definitely a win win situation, a win for the bankers and a win for the government, it’s only the average person who loses by having their pockets picked.

We can’t blame all of this on the bankers, the corruption in the Western financial world runs right to the root of the problem, government. By allowing central banking to exist, governments can ensure their own financial safety net and survival from having a system which continuously prints money to fund deficit spending. To remain in power, Government’s control only exists and grows because of taxation and the rules and regulations they impose on their citizens. Take France for example, their constitutional council and highest court just gave the green light to Hollande to introduce a top tax rate of 75 percent on earnings over one million Euros.

Of course, the most corrupt government in the world is the United States. Having the status of the world’s currency reserve empowered them to build the biggest army, thus giving them the ability to bully any other nation state by way of force or death. And if they don’t attack you directly, they surely will spy on you electronically via the NSA and they will definitely tax and fine you for non-compliance to their rules and regulations.

I always wondered if the US will ever get their deficits under control and how they will reduce their debt burden. One way for sure is that the US will tax and regulate their way out of financial debt by taking wealth that was hidden from them. After reading an article on how Swiss regulators recommended banks take provision for US tax deal, it became pretty obvious that all international bankers will be forced to comply with the US regulators or get shut out of their system.

The real irony of the situation is how this system is gamed right from the beginning to end, which then comes full circle to help governments. The bankers have been cashed up via the central banks and are making tremendous profits trading rigged markets. All this new wealth now on the banker’s balance sheet will be heavily taxed over the coming years and used to pay off fines imposed on them by governments and regulators.

In short, the corruption in US banking to help government finances, spending and debts goes like this:

The Federal Reserve central bank print money from nothing.

The CB then gives this newly printed money to big banks to buy US debt.

The “To Big to Fail” banks then sell the US debt back to the Fed (for a nice profit) and receive more money.

The big banks who are now cashed up, conduct proprietary trading to rig markets for even more profits.

All this extra ill-gotten cash sitting with the banks is then taxed, and/or regulated and fines are imposed for illegal rigging of markets.

This money is then given back to the US government which probably helps extinguish some debt or pays for gov’t expenses.

In this system of corrupt Western finance, the only people that lose are the people or entities who don’t see it happening or can’t take the necessary steps to avoid the theft and confiscation, and then actually profit from it happening. Anyone with savings will also get burned by either the devaluation of fiat currencies or outright theft of deposits at the banks by way of bail-ins or nationalization of retirement savings. Either way, the average person is at a disadvantage in a no win situation if they leave their assets in the western financial system.

The window to get your wealth out of the traditional western financial system is closing. Anyone who does so now will be saved from the ever growing corruption and theft that is coming down the road. Precious metals are one of many assets that should be continuously accumulated now and on any further pullback. At this point the rigged price of the metals is not as relevant as the number of ounces you own and hold outside the financial system, and that window is rapidly closing.

]]>http://tdvgoldentrader.com/blog/rss-comments-entry-34538428.xmlThe US Asset Bubble Continues to BuildTDV Golden TraderFri, 08 Nov 2013 15:30:34 +0000http://tdvgoldentrader.com/blog/2013/11/8/the-us-asset-bubble-continues-to-build.html1063751:12278810:34411145There seems to be growing commentary that Central Bank policy of printing money by way of quantitative easing are creating bubbles that will eventually crash in a bust. Here are a few notable quotes from some very prominent people.

William White is the former chief economist of the Bank for International Settlements (BIS), he recently made the following statement:

"All previous imbalances are still there. Total public and private debt is 30 percentage points, as measured by the gross national product of developed countries. And we have a whole new problem with bubbles in emerging markets, which will end in a boom-bust cycle."

Other statements made by people at the BIS and World Bank:

Claudio Borio, responsible for research and development at the BIS: "There are limits to how far the good communication can control markets. These limits are too obvious."

Late last year warned Kaushik Basu, chief economist at the World Bank: "A debt wall coming towards us."

An interview with Paul Craig Roberts (Former Assistant Secretary of the Treasury for Economic Policy) can be read here. In it, he makes some bold statement about the state of the financial markets and the looming currency crisis in the US dollar. Most notably he states:

“In a way the dollar has already lost its reserve currency status, but this development has not yet been officially realized; nor has it hit the currency markets.

“The Federal Reserve’s policy of creating large amounts of new money in order to support the balance sheets of “banks too big to fail” and to finance continuing large budget deficits is another factor undermining the dollar’s reserve currency role. The liquidity that the Federal Reserve has pumped into the financial system has created enormous bubbles in bond and stock markets. US bond prices are so high as to be incompatible with the Federal Reserve’s balance sheet and massive creation of new dollars.

“In other words, in order to avoid an immediate crisis, the Federal Reserve has to continue a policy that will produce a crisis down the road. It is either a financial crisis now or a dollar crisis later.”

Most conventional assets priced in US dollars are being inflated by the central bank’s bubble printing machine. Real estate is on the rise again, the stock market measured by the broader indexes (Dow and S&P) are hitting all time highs and still have a rising trend line, the bond market is still at lofty prices.

We can attribute most of this rise because of a low interest rate environment and the printing press continues to run full speed ahead with very little slow down in the foreseeable future. The recent tapering talk coming out of the US central bank has been squashed for now and will probably remain that way until the new incoming Fed Chair Janet Yellen takes over control of the most dangerous financial entity in the world, the US Federal Reserve Bank. By early next year, we will get some clear direction if tapering is still on the table or QE at these levels continue indefinitely and potentially increase. All three scenarios are possible as the Fed has lost all credibility with the market, however they only know one thing and that is to print money and continue blowing the debt bubble higher.

Going into the New Year, we also have the US debt ceiling talks heating up again which may have some impact on the market. Most likely they will increase the debt ceiling once again, like they have done every other time in the past.

What has me wondering is why they only pushed off the decision for a few months this time around versus increasing it for a full year. Could the US have reached its full borrowing capacity from the international community? Is it now buying time until we get a blow back from the sovereign lenders? We could very well be at a moment in history where the US begins to officially lose its reserve currency status.

Last month in China’s official press agency Xinhua, the op-ed by writer Liu Chang wrote an article in which he calls for a new reserve Currency and states “US fiscal failure which warrants a de-Americanized world”. The article goes on to say “Most recently, the cyclical stagnation in Washington for a viable bipartisan solution over a federal budget and an approval for raising debt ceiling has again left many nations' tremendous dollar assets in jeopardy and the international community highly agonized”. While main stream media rarely picks up on stories like this, it is hard for them to ignore the writing on the wall and even the LA Times picked up the story.

The Rise of the Yuan and Dim Sum Bonds

While the demise of the US dollar as the world’s reserve currency may not be set in stone just yet, the drum beats are getting louder. Evidence continues to mount that China is making the Yuan (Renminbi) a more widely accepted medium of exchange in the international community.

We have heard about bi-lateral trade agreements between many BRICS countries in their respective currencies, thus bypassing the US dollar for international trade.

This week, the BC government in Canada has become the first foreign government to issue offshore Yuan bonds. The oversubscribed bond offering was intended to raise only 500 million Yuan, but the BC government completed the issuance of one-year Yuan denominated bonds and raised 2.5 billion Yuan carrying a yield of 2.25 percent. The sole book runner of the issuance was HSBC and the bonds will be listed in Luxembourg.

China’s Ministry of Finance said on November 5th that it will sell Dim Sum Bonds worth 10 billion Yuan in Hong Kong on November 21st, the second issuance this year. They sold 13 billion Yuan worth of bonds in June of this year.

With deals being made all around the world, the Yuan is gaining traction in global currency markets and is set to challenge the US dollar in the coming decade. The Yuan, also known as the Renminbi “people’s money”, is being setup for greater use as a currency around the world.

The policy makers in China have made new efforts to increase the use of Renminbi in global markets. A deal with Britain in October allows for London based institutions to bypass Hong Kong and invest directly in China with an initial quota for 80 billion Yuan ($12.9 Billion). In the same month, a similar 50 billion Yuan agreement was signed with Singapore. A currency swap deal with the European Central Bank in the amount of 45 billion Euros gives banks in the Eurozone greater access to the Yuan.

Since the beginning of this year the Chinese currency has strengthened towards 6.0 Yuan to one US dollar. Even thou the currency exchange rate is controlled by the authorities, it has been allowed to appreciate over the last few years and trading volumes have increased significantly in the last year. Standard Chartered economist Stephen Green estimates that by 2020 the Yuan will become the world’s fourth most commonly used currency in international trade where $3 trillion in business transactions will be denominated in Yuan.

The road to becoming a commonly used currency for trade will be long and drawn out, China is in no hurry to have its exchange value for its currency freely traded. The government will most likely retain control of the currency peg to the US dollar in order to maintain stability in value of the Yuan. However, to provide a liquid market, China will most likely print Yuan at a rapid pace much like the Federal Reserve is doing for the US dollar.

With a lot of fat and no substance (and possibly no gold), the Fed’s balance sheet is leveraged up almost 70 times its net worth. The Fed holds $3.84 trillion in assets (mostly treasury bonds and mortgage backed securities) and has only $54.86 billion of capital. So as the buyer of last resort, the Fed will continue to buy treasuries going out over 10 years while still trying to control the interest rate market in the western world.

While the U.S. bond market is an endless buffet in comparison to the Dim Sum Bonds, the world’s appetite for treasury bonds is diminishing. The Fed may have to continue eating at the Treasury bond trough via QE, but that pig is already way too bloated and needs to be put down much like the currency it supposedly issues and supports. So as China continues to expand its bond market around the world where there is a healthy and growing appetite for Dim Sum bonds with a yield at 2.25%, the U.S. Treasury bond market is experiencing a form of investor anorexia.

Overall, this trend doesn’t bode well for the US bond market and its currency. It seems like the bond vigilantes are not focused on slaughtering the US bond pig just yet. For now bond investors have decided to look elsewhere including corporate bonds and debentures, and of course buying Dim Sum Bonds. While the rise of China’s currency will continue for the next decade, so will the decline of the US dollar.

China Takes A Bite Out Of Gold

The one thing China does have going for it is it’s appetite for Gold. The rate at which it increases the amount of Yuan available for international trade, it is also increasing its gold holdings. In 2012, gold imports from Hong Kong amounted to 835 Tons. Zero Hedge also noted that the total gross imports since September 2011 are now 2232 tons.

Year to date in 2013, imports are now over 1113 tons. At the same time that we are seeing record imports of gold through Hong Kong, China is a major producer of gold. In 2012 they have produced 403 tons domestically, none of which leaves the country.

This gold accumulation will most likely not slow down over the coming years. Their goal is to diversify out of the dollar and into hard assets. Owning gold is just one part of the Chinese strategy to break away from clutches of the US currency and that will most likely not change in the foreseeable future.

If you enjoyed reading this article and are interested in protecting your wealth with precious metals, you can receive our free blog by visiting TDV Golden Trader.

Cheers,

]]>http://tdvgoldentrader.com/blog/rss-comments-entry-34411145.xmlThe Central Bank’s Control Over The Gold TradeTDV Golden TraderMon, 23 Sep 2013 20:04:02 +0000http://tdvgoldentrader.com/blog/2013/9/23/the-central-banks-control-over-the-gold-trade.html1063751:12278810:34278615By now, it’s no new news that the central banks around the world (especially the US Fed) are controlling all markets. This includes policy for manipulating interest rates, the US Treasury bond market, general stock market via the plunge protection team, the real estate market via mortgage-backed securities and the overall economy. What is rarely talked about in the mainstream media is the central bank’s noose around the precious metals market. While they have you believe the price of gold trades based on free market supply and demand, nothing could be further from the truth. Anyone who follows the precious metals market can tell you that it is easily the most controlled commodity in terms of price on the paper market.

Unlike most other commodities which rely on supply and demand fundamentals to determine price, gold’s price is currently set by bullion banks in the leveraged paper market via futures and ETFs. By having control of the price for gold via paper trading, deep-pocketed and well-connected players like the bullion banks can set the price via the LBMA and Comex. By having control over the paper price, they are best situated to profit from dramatic price movements in either direction, especially when you are so closely tied to the Fed’s policy and pool of capital. Unfortunately, control over the price of gold will remain in the hands of manipulators until they have no physical gold left or we see a loss of confidence in the paper fiat monetary system currently in place. The day of reckoning is close at hand and eventually the precious metals market will move to the real price for physical gold price and away from the shenanigans of the paper price of gold.

Evidence the central planners are losing control over the paper price of gold can be seen by last week’s announcement by the Fed not to start tapering. Gold spiked on the news and jumped $60 within hours; silver also rose significantly by well over a dollar. It looks like a new uptrend could be in place from the summer lows and we could be well on the way to a technical breakout higher if the top of the sideways trading is breached. I suspect all the news of tapering or not have been known to the market for quite some time and that has been already factored into the trading range price action of gold. The technical trading over the last two months is driven by news from the Fed, media and political events; this essentially allows market makers to drive prices based on a controlled trading range.

We suspect the controlled trading range price of gold will remain in effect until some big event occurs which breaks gold out of the sideways trading range, which now looks to be between low $1300 and $1420 on gold. Looking at the chart below, as gold broke down since March it made a series of lower lows in terms of price each time the RSI dropped below 30 while never going strongly above 50 for any period of time. The good news is that the RSI indicator finally went above 50 and even recently reached 70 at the end of August and in doing so likely has started a new uptrend. Since the July bottom, gold started to make a new uptrend in a series of higher lows after each price correction. Since then, each time the RSI dipped below 50 and reached the low 40s, it presented a buying opportunity. Selling opportunities will now come when the RSI goes above 60 as the current sideways trading range continues, but this could occur in a pattern of higher highs and higher lows thus establishing a positive uptrend.

As for the longer term trend still in place since the beginning of the year, the down trend channel line is still acting as overhead resistance. At the end of August, gold did touch this trend line acting as resistance when it reached about $1420. At that time, I did suggest to TDV Golden Trader subscribers that gold could see a correction over the next two weeks and that it will be a good time to buy close to the 50 dma. Here is what I wrote:

“Short term, I think we could start seeing some backing and filling in the first couple of weeks in September. If we do see pull back to test the $1350 price range breakout ($1280 is possible, but doubtful), I suggest looking to add to current positions on any pull back towards the 50 DMA which is currently at $1308.”

The end of last week and the beginning of this week brought the price target I was looking for as the next good entry point. Once the market got the all clear signal from the Fed not tapering, it sent gold higher and back into a positive direction both in price and on the RSI, the MACD now looks to be turning up. Any price dips here should be bought (below $1340 is a good entry price over the next week) as I suspect we will head back higher on the RSI and I am looking for the next selling opportunity to come as the RSI is back above 60. If the RSI does trend back above 60 and possibly to 70, I am hoping gold will make a new higher high in the recent uptrend since the summer doldrums. The 200 dma at $1483 is when I would expect the next high to come as the RSI goes above 60 again, this should take a few weeks to play out and I am expecting it sometime in early to mid Oct as the debt ceiling talks heat up.

What does concern me is that the overhead resistance down trend line hasn’t been breach to the upside on a strong move yet. So this could mean that we see some resistance around $1380-$1400 or even Wednesday’s price jump could act as resistance, and we may see a slight pull back to below $1340 over the coming week. Once the pull back in price over the coming week is complete, I suspect the price could challenge $1420 again break above the overhead resistance downtrend line. If this happens going into early October, it will be very bullish price action and we can feel confident that the worst is behind us from the past summer. A strong break above the downtrend resistance line based on fundamental news could easily drive gold back to above $1500 (possibly $1550), but that is something we will look at later on down the road. If gold is not able to clearly break above the downtrend resistance line identified in the chart over the next few weeks, the price is likely to retrace back to support at initially $1300 and possibly at the lower end of the range at $1260.

How much control the bullion banks have over the paper price of gold will most likely be determined over the coming months. If the price of physical gold overcomes the resistance trend line in place since the beginning of the year, gold is definitely on a new uptrend and the controlled paper price becomes less relevant. This past week has clearly shown us that the central banks have no clear direction or guidance on how much quantitative easing is needed to revive the world economy. All they know is how to print money, and they will continue to pursue that policy until they lose total control of all markets. Once that happens, gold will be freed from paper pricing and the true price for physical gold will reign supreme.

If you enjoyed reading this article and are interested in protecting your wealth with precious metals, you can receive our free blog by visiting TDV Golden Trader.

The current gold bull market that has been going on for well over 10 years has never entered a mania bubble phase, especially when you compare it to pervious bubbles of the past. If we compare today’s gold price rise to that of the 1970s gold bull market, or the 1990s tech bubble and the 2000s oil run, we can clearly see that this gold bull market has underperformed on a percentage basis. The three other bubbles took about nine years to go from the start of the bubble before it hit the mania exponential rise in the last 2 years. It seems like starting in year 7 after a small correction, the bubble making process starts to go exponential and can clearly gain several hundred percent in the final phase.

The current bull market for gold has risen steadily for about 9 years, but on a percentage basis we still haven’t seen the exponential rise in a 1 to 2 year period that would clearly mark it as a bubble mania phase. In fact, after making solid gains and rising for 9 years, the gold market has essentially gone sideways over the last eighteen months. The good thing is that in the previous bubbles, after it burst the asset class had given back several hundred percent in the 1-2 years following the peak. Luckily we haven’t seen that in this bull run for gold, not yet anyways, but we could see the cycle bottom later this year. The recent correction has given back about 20% from the peak of just over $1900 to just below $1550.

Can the correction continue and steepen to the downside? Sure, anything is possible, especially in a market that can easily be manipulated. But looking at the charts below, gold never went into a mania exponential rise and has been consolidating sideways for 18 months. This gold bull market run is definitely not like previous bubbles and the further this correction at these prices goes out in time, the more likely we will still see one more mania phase push higher with a several hundred percent rise before we can state that gold is truly in a bubble.

Graph courtesy of Macrotrends.org - This chart tracks the performance of gold since July of 2002 against the three largest bubbles of the last 40 years. Past bubbles have shown strong but steady growth for the first 7-8 years before moving into a hyper-growth phase for the last 18-24 months. Each series is adjusted for inflation and is smoothed with a 3-month moving average.

Dow vs. Gold Over the Last 100 Years and in the Current Bull Market

When we look at the Dow to Gold ratio for the last 100 years we see that the Dow has traded between less than 5 times the price of gold on several different occasions. Most of this time was between 1915 and 1940s, with the exception of the roaring 20s when the stock markets outperformed gold significantly. The only other time we saw gold become over valued compared to the Dow was during the 60s and 70s, this was the last time when gold was in a bull market and it lasted less than 20 years. From the early 1980s to about 2000, the Dow has clearly outperformed gold going from one extreme to another. In fact, at the peak of the Dow to gold ratio in 1999, you could buy the Dow 45 times over gold, but ever since then gold has been outperforming the Dow up until recently. What we haven’t seen during this bull market for gold is a Dow to Gold ratio below 5 which could easily mark gold as way over valued compared to the Dow. In order for gold to be considered in a bubble territory, history has shown us that we need the ratio to be clearly below 5 to 1 on a spike low.

Graph courtesy of Macrotrends.org

Now let’s take a look at the recent chart for Dow to Gold over the last 12 years shown below. Starting in 1999, the Dow was priced 45 times gold and since then has given up a significant portion of that ratio. In 2011, the ratio did go as low as 5.7 to 1 when the gold price peaked at about $1900 and ever since then the Dow has been advancing while gold has still been correcting. Today the Dow to Gold ratio is about 9 to 1 and the Dow just made all time highs at 14,286 while gold is sitting at about $1580.

While the ratio is working in favour of the Dow for the moment, it would clearly need to break above 10 to 1 on a strong advance before we can say that gold is in trouble and that the bull market may be over. The 10 to 1 Dow to Gold ratio can be considered the line in the sand; this is where a period of great consolidation will take place before any judgement can be made. Assuming gold stays at about $1600, the Dow can easily move to all time new highs and towards 16,000, it will probably do so by May. At that time, the Dow will most likely take a pause and possibly start a correction going into the summer.

The only question is what will gold do once we reach the 10 to 1. Does it enter a strong bear market and retreat further compared to the Dow as it goes on to make all time highs from Fed enduced printing? Or does the bull market in gold reassert itself and the Dow starts a correction as we move back towards a 5 to 1 ratio. Looking at the chart above, the Dow to Gold ratio is still in favour of gold but has started to move sideways. Maybe a new trading range of 5 to 1 and 10 to 1 between the Dow and Gold still holds for the remainder of the decade. If that is the case, we are much closer to the Dow being at a top and gold at a bottom if the 10 to 1 ratio holds. At some point in the next decade we could see this ratio dip below 5 to 1 which would mean a strong rise in gold compared to the Dow at it enters bubble territory, but we are clearly not there yet.

One thing the charts above clearly show are that gold has never entered a strong parabolic rise into bubble territory. If that was the case, we would have seen a strong percentage gain of several hundred percent in gold within a very short period of time, of which it would be all given back in the same amount of time. Also, looking at the 100 year Dow to Gold ratio chart, the ratio never went below 5 to one which would mark that gold was way over valued compared to the Dow on a historical basis.

The Gold Miners Have Under Performed Everything

As for the gold miners, the XAU is a much broader index used to measure the performance of 30 mining companies. A chart courtesy of James Turk from Gold Money shows how the miners have done compared to gold since 1988. As we can clearly see, gold has outperformed the Dow and the miners during the current Bull Run we have been in. Following the melt down that started in 08, the miners have seriously underperformed and have gone on to historical lows compared to gold. During the 90s when there was technically no bull market in gold and you could buy the mining companies in the XAU index between 6 to 10 grams of gold. The range between 6 to 8 grams of gold for the XAU held between 2001 and 2008 when the bull market started. Since 2008, the miners have seriously underperformed versus gold and you can now buy the index for less than 3 grams of gold. The miners are extremely cheap compared to gold; in fact they probably have never been this cheap throughout history.

If you enjoyed reading this article and are interested in protecting your wealth with precious metals, you can receive our free blog by visiting TDV Golden Trader.

Cheers,

]]>http://tdvgoldentrader.com/blog/rss-comments-entry-32927370.xmlUpdate on Gold and the HUI Gold Bugs IndexTDV Golden TraderFri, 11 Jan 2013 21:00:13 +0000http://tdvgoldentrader.com/blog/2013/1/11/update-on-gold-and-the-hui-gold-bugs-index.html1063751:12278810:32530581In spite of the recent down turn in the price of gold and silver, we still remain bullish on precious metals and its equities. Regardless of its paper manipulated price (if you believe this is currently happening), history has shown us that gold is money (not fiat currencies) and it is no one else’s liabilities. When it comes to gold, as always we suggest owning the physical metals outright fully paid for and stored safely where only you have access to it. If you have a significant holding in the physical, it may be wise to diversify your gold internationally in order to minimize country and political risk by reading Getting Your Gold out of Dodge (GYGOOD). Gold seems to be gaining strong support under $1650 which should most likely hold, so now is a great time to be adding to physical holdings.

We could be at transition period in this bull market where the paper gold price dictatorship comes into question and the democratic free market physical price will start ruling the golden kingdom. The dictatorship by Western central planners over the gold price is ready to be challenged and we may come to a point in history where only votes based on actual physical holdings will be counted. There will be no hanging chads counted on this financial election ballet, its either you own the gold legally and outright, or you have paper promises for imaginary gold (similar to government bond and fiat money) where the question around ownership will arise. Trust us; you don’t want to be one holding paper receipts in questionable gold backed investments engineered by most western financial institutions. Ask yourself, can you trust the source of gold dictatorship to protect your financial assets, especially when it comes to your gold holdings?

HUI and the Gold Miners

When it comes to owning the gold miners, we actually believe we hit the bottom of the market this past summer and then most recently this December. Back in the summer we suggested adding to positions and selling into a September rally for trading positions and then look to add back position in the November/December time frame.

Looking at the HUI chart below, it seems this past December low finished off the correction that started in October. If this does turn out to be the lows, then I see some really positive signs in the charts. Since the beginning of December, the RSI, and MACD have been turning up after being in negative territory and they both look like they have room and momentum on their side to move higher. This means the HUI has a good chance at starting an intermediate uptrend which should last at least a month to two and go towards an initial target of 475 before taking a pause.

What is most encouraging is seeing HUI start to make a new trend upward from May 2012 in a series of higher highs and higher lows, this is a positive development especially if the December lows of 425 hold. What would be more encouraging would be to see the HUI start a new uptrend right now, go to 475 and then blow past it to test the resistance seen at 525 in September. If the gold miners do catch a strong bid and can get past the 525 hurdle that is in front of us, then we can be confident that we really do have a strong rally in the miners and that the uptrend will continue to make higher highs and higher lows moving forward. Eventually it may blow past the old highs of 625 which may come sometime towards the end of this year, but most likely in early 2014.

If you plan on trading these markets, pay attention to the above mentioned numbers on the HUI for places to lighten up on positions and then buy back in on any pull backs in a series of higher highs and higher lows. If we are right on this pattern and uptrend, then the next wave up should take out the September high of 525 and more likely run to 575 (hopefully by spring) before we see a significant correction going into the summer doldrums maybe back towards the 450-475 level. Then I suspect we could see a strong yearend rally that goes well into the early part of 2014 and at that time I expect the HUI to be back close to all time highs. This is what I see happening technically on the charts and hopefully the fundamentals will allow this to play out over the coming year and a half; of course this is based on normal market activity and no market manipulations. This is the strategy we have been planning for TDV Golden Trader subscriber and how to play this new uptrend that could be emerging over the next year.

If you enjoyed reading this article and are interested in protecting your wealth with precious metals, you can receive our free blog by visiting TDV Golden Trader. Also learn how you can purchase and protect your gold holdings by getting a copy of our special report Getting Your Gold out of Dodge or protecting the stock investments you currently own with Bullet Proof Shares.

Cheers,

]]>http://tdvgoldentrader.com/blog/rss-comments-entry-32530581.xmlGold Convertibility and Reserve CurrenciesTDV Golden TraderTue, 27 Nov 2012 03:30:11 +0000http://tdvgoldentrader.com/blog/2012/11/26/gold-convertibility-and-reserve-currencies.html1063751:12278810:31387988Lately we have seen many articles about China and many other central banks continuing to buy and increase their holdings of gold as part of their effort to continue diversifying out of foreign paper currencies. Who can blame them? Would you want to hold paper promises to pay off financial obligations from countries that are essentially bankrupt as a part of your currency reserve? China is doing what is the right thing and in the best interest of China, buying more gold to hold as a part of your reserves in order to make your currency more marketable. They want to make the yuan a competing currency to the other major currencies around the world and they will succeed and owning gold is part of their strategy.

There is some speculation that China is increasing its gold holding to make the yuan a gold-backed currency in an effort to make it a world currency reserve. While it is an interesting concept, it will most likely never happen. In order to back a currency, their gold holdings must increase or decrease alongside the increase or decrease in the number of currency units in the system. A gold backed currency would entail having a fixed rate of convertibility for each ounce of gold to a specific number currency units issued by that country. There is probably no country in the world that will honour convertibility on a fixed basis, it would be financial suicide and is part of the reason why Nixon closed the gold window. Also having a gold backed currency would mean the country would be continually increasing gold purchases to match the inflation of currency units issued. Tracking the amount of gold that is backing currency would also be next to impossible since there is a complete lack of transparency around the amount of currency units being issued by central banks and the amount of gold held by them. Currently currencies can be converted to gold on a floating basis at market price, but going to a gold backed currency would likely never happen.

China is making its currency more readily available for trade, thus bypassing the US dollar and making its currency the payment of choice for its export. Currently the yuan is fixed to the US dollar, but over time it will most likely have to adopt a floating currency like the rest of the world. Until then, expect China to continue adding to its gold reserve in an effort to make the yuan a competing currency for international trade. The US will lose its reserve currency status over time (most likely some time this decade) but it most likely will never go away completely and the yuan will not take over completely. We will most likely just have bi-lateral trade agreements with several national currencies being used for payments. The yuan is just the new kid on the block but there is still the Euro, British pound, Japanese yen, the US$ and probably the IMFs SDR that will also be used. Even the Canadian dollar has been strengthening lately, as the IMF said it’s considering classifying the Canuck buck and the Australian dollar as reserves currencies.

While gold may not be convertible at a fixed rate any time soon, VTB Group is Russia’s first lender to sell perpetual bonds and debt linked to the country’s benchmark equity index and is now selling the nation’s debut notes tied to the price of gold (see Bloomberg article). VTB is offering 1 billion rubles ($32 million) of securities that will be redeemed in December 2013 that will pay a rate on returns based on the gold price up to a limit of 20 percent. Being a pioneer in the Russian market, VTB is the 2nd largest bank and will provide pension funds an alternative to invest in gold without the limits placed on commodity holding by regulators. The article even talks about how even Western financial institutions such as JP Morgan, Barclays, and Credit Suisse are issuing notes tied to gold this month. This is just another example of how gold is becoming an important financial asset. The need to diversify and protect wealth becomes more apparent in an era of currency wars which will destroy the value of fiat money. Financial institutions realize that central banks will continue down the path of printing money, inflation and currency devaluation, there is no other choice. They see the writing on the wall and are now capitalizing on a new markets by providing financial assets tied to the price of gold price.

All these currencies will continue to inflate and I doubt the bankers will allow gold to become a competing currency for everyday transactions. However its role as a store of value will continue to appreciate as long as fiat money continues to exits. So we should be happy that government and central bankers will continue to use and expand fiat currency, it makes their currency worth less and gold will continue to benefit in the long run.

What we are seeing now, with short term fluctuations in the price of gold is just market noise and short term trading opportunities created by the gold market high frequency traders and bullion banks. This will come to pass as the price of gold gets smoothed out and then slowly advances higher with a two steps forward one step back dance along a rising trend. All this talk about gold by mainstream media is just market noise to try and explain very short term movements in price. They have very little understanding of gold and the role it will play in the future as a store of value. Being the good slaves and puppets for the central bankers, MSM is only good at misdirecting the public and they are paid very well for doing so. Once gold finishes this consolidation, the price should continue to advance to all time highs in 2013 and 2014 with a possibility of doubling from the current price to reach a minimum target of $3500 in the next few years.

If you enjoyed reading this article and are interested in protecting your wealth with precious metals, you can receive our free blog by visiting TDV Golden Trader. Also learn how you can purchase and protect your gold holdings by getting a copy of our special report Getting Your Gold out of Dodge or protecting the stock investments you currently own with Bullet Proof Shares.

Looking at the gold chart below, we can see that gold has been correcting over the last two weeks. When applying some technical analysis to the gold chart, we can clearly see that there would have been overhead resistance at $1800 since most of the year gold has traded between $1550 and $1800. A few weeks ago, we also noticed a big build in the short position on the Comex’s Commitment of Traders report COT by the commercial and bullion banks. The effort to stop gold’s advance at a key resistance level was successful in part because of the huge increase in the short position at that level, which is why we knew to take some profits and that would be an ideal place for a correction to start.

Now that the correction has started and gold is giving back some of its gains from the summer, the question now remains: How much of a retracement will we see on the price of gold? While the shorts are currently in control of driving the price down, support will come from other central banks and buyers of physical gold.

With gold at $1701, it is currently (noon on Tuesday Oct. 24) sitting below the 50 dma at $1720 which is above the 200 dma at $1662. The first line of support for this coming week was at $1720 and if it holds above the 50 dma the correction in gold could be over. If we continue to see weakness in gold over the next week or two, we can expect the correction will continue later this month and going into elections. This is something I suspect could happen if the overall markets continue to remain week.

Looking at the chart we suspect that buying will come in at the new support price range at about $1650 (+ or - $20) if the 50 dma at $1720 doesn’t hold this coming week. One thing to note is that the 50 dma crossed above the 200 dma around the end of September, which is an over good sign. However it needs to remain above the 200 dma for this advance higher in gold to hold before it can go on to make new highs. We remain optimistic that gold will either bounce here at the 50 dma of $1720 or at a retest of the 200 dma of $1662, which would still be bullish over all. If you are looking to add to your physical gold holdings and diversifying them internationally, scaling in now and at the $1650 price range would be a good place to start adding to current or new positions. Keep in mind that the support at the 200 dma may not hold, which means the price of gold can retrace right back to longer term support at $1550 which has been in place all year. However, I give it a small probability that we will correct back to that price range as we are entering a seasonally strong part of the gold cycle in November and December.

While I hate making predictions on what the gold price will do short term, I suspect it could consolidate between $1650 - $1750 for the remainder of the year. While we are entering a stronger part of the gold season and the fundamentals are lined up to suggest higher prices, we have conflicting events such as a huge concentrated short position, the US elections, the US fiscal cliff and tax loss selling to deal with for the remainder of the year. With 2 strong opposing forces acting on one another, the price of the metal may consolidate around $1650 - $1750 for some time until either the bulls or bears clearly take this market in one direction or another. Until then, all we can do is sit around and wait for a clear break outside the trading range that has been established over the last year.

HUI Gold Miners Index Analysis

Just like gold, the HUI index is also correcting since September. Earlier last month, we thought index would trade to 520 before meeting resistance, which we can clearly see it has done and it is now in the process of correcting. It would not be unusual for the index to give back up to 50% of its recent gains from the summer lows. Back in July, it looks like a low of 385 was made on the index and a recent high of 525 was achieved back in September; this is a 140 point gain. So if the market was to give back 50% of this gain or 70 points, we can expect the HUI to retrace back to about 455, which would be the next best time to add to positions.

Currently the HUI is at 495 which is still above the 50 dma at 482 and the 200 dma at 465, which is a positive alignment if the index can hold these gains. One thing to pay attention to from the chart below is the price action on the HUI from April this past year to the end of August, a period called the summer doldrums. During this period support came around 385 and was tested 2 different times, while overhead resistance was at 450 which also was tested a couple of times. Back then 450 was overhead resistance which was finally broken with a strong move higher during September; we suspect this will now become the new support level while 520 will act as resistance.

While we still remain cautiously optimistic that a new uptrend has started longer term, the HUI will most likely correct back to the 460 range ( + or – 10 points) over the coming months and 520 will now act as overhead resistance as a new trading range will be set. In general, support around 465 (the 200 dma) is where we would look to initiate new positions in some of the senior producers and hold them going into the New Year. At some point, I do expect overhead resistance at 520 will be breached to the upside at which point the HUI index could run to 580 and higher, but that would mean gold would have to be on fire and trading above its overhead resistance at $1800 on a holding basis. Until then, the miners will probably trade in a range where the HUI fluctuates between 460 and 520 as long as gold stays above $1650.

US Dollar Analysis

While the US dollar is looking good at the moment and getting a nice little bounce higher lately, this could be very short lived. The up channel that has been in place from August 2011 to August 2012 has been clearly broken and now it has started a new down trend channel this past August.

All we are seeing is a current bounce from oversold levels on the RSI and MACD and it already seem to be stalling out. The US dollar could move slightly higher to test the 50dma of 80.38 or the top of the new down channel at 81, but the rally should stop there. One thing to note is that the 50 dma just crossed below the 200 dma in the last few days, that is not a good sign. Once this relief rally is over, the dollar should continue downward and possibly to the bottom end of this downward channel. This could mean a definitive move below recent support around 78 on the index, if this happens and support is broken, it could lead to a cascading move downwards towards 75 or possibly 73.75 as the next major support level. If the dollar does break down, gold and silver will shoot much higher.

The best hope for the US dollar is for it to sit in a channel between 78 and 81.50 which is where I think it could trade sideways for some time until we clear the elections and get some direction on fiscal policy from the Fed. If the dollar goes sideways, G and S will also trade in a sideways channel. More than likely we will get some clear direction once the election are done.

If you enjoyed reading this article and are interested in protecting your wealth with precious metals, you can receive our free blog by visiting TDV Golden Trader. Also learn how you can purchase and protect your gold holdings by getting a copy of our special report Getting Your Gold out of Dodge or protecting the stock investments you currently own with Bullet Proof Shares.

]]>http://tdvgoldentrader.com/blog/rss-comments-entry-30039250.xmlProject Funding in the Mining SectorTDV Golden TraderWed, 19 Sep 2012 17:41:18 +0000http://tdvgoldentrader.com/blog/2012/9/19/project-funding-in-the-mining-sector.html1063751:12278810:29135501Over the past summer we suggested that we would see more money become available to quality mining projects from banks sitting on tons of cash ready to loan out on credit worthy projects in their ever increasing need for higher yield. In our September 11th, 2012 blog post we stated that “Project funding will become available via bank loans on favourable projects; we can expect alot of money coming into the resource space and new projects will move towards production”.

Here is an exerpt from the TDV Golden Trader newsletter sent out to subscribers on July 23, 2012:

I suspect alot of that money will come into the commodities market and especially into the mining sector. There are many great projects which show great preliminary economic studies with today's current prices of commodities. Banks can provide the funds necessary to help put projects into production by way of corporate bonds or loans with higher interest rates. Even with a 7-10 % rate, many of these projects are very economical, provide a positive IRR and have short payback period (3-5 years). Potential producers should really look at this option for funding their projects, the interest rates are reasonable and this would eliminate the need for further dilution.

It is also in the bankers’ best interest in making these loans to the various development projects for many reasons. First, they will be making a much higher positive yield over the next 3-5 years than most other fixed income investments. They can probably become first in line as a creditor guaranteeing their investment and using the company assets and reserves to help determine valuations as possible collateral. Also, their funds are probably safer at a cash flow positive producing mine versus buying bonds of a pig country that can only make interest payment by robbing Peter to pay Paul. In their need to make secure investments, banks can also guarantee their payments will not be interrupted by keeping a floor under the commodities prices. This floor price can be achieved by forcing the producer to hedge part of their production at current prices, thus guaranteeing a predictable minimum future cash flow.

Lately we have seen more debt offerings, issuance of debentures and credit being given to mining companies who can prove strong economics on new projects or expansion to current mining operations. Here are few examples from the last few months:

Stornoway Diamond Corp. (TSX:SWY) has entered into a mandate letter with seven financial institutions concerning debt financing for the company’s Renard diamond project in northern Quebec. The mandated lead arrangers are Bank of Montreal, Caterpillar Financial, Export Development Canada, Investissement Quebec, Nedbank Capital Limited (London Branch), Societe Generale (Canada Branch) and The Bank of Nova Scotia which will arrange senior loans of up to $475 million, the company says.

Lake Shore Gold Corp. ("Lake Shore Gold" or the "Company") (TSX:LSG)(NYSE MKT:LSG)announced today that the Company has completed the previously announced public offering (the "Offering"), on a "bought deal" basis, of C$90 million principal amount of 6.25% convertible senior unsecured debentures (the "Debentures") maturing on September 30, 2017.

Kirkland Lake Gold Announces $50 Million Private Placement of Convertible Debentures - The Debentures will mature on June 30, 2017 (the "Maturity Date"), unless earlier redeemed, and will bear interest, accruing, calculated and payable semi-annually in arrears on June 30 and December 31 of each year, at a rate of 6.0%.

While the quality juniors have been able to raise capital in the last year, most are still finding it difficult to raise funds. In the past, small producers and exploration companies relied on the capital markets to raise funds by way of private placement and issuing shares which have been highly dilutive and overall negative for investors in these companies. We have a feeling that many juniors will be able to raise capital in this market, but they will have to be creative in their approach to getting funding deals done without diluting shareholders.

In my opinion, Samsung, being a visionary in the electronics industry, has realized it needs to make strategic investments with its cash in order to protect purchasing power and secure availability of gold and silver to be used in its products. This is a game changer and as fiat paper currencies get destroyed by the central banks and governments, the smart money will continue to gravitate towards gold, the true store of wealth. This could be the start of a new trend where private sector corporations start paying attention to gold as currency and hedge against paper assets. I would expect this trend to continue as more private companies and fund manager will find a need to diversify out of paper money and into the currency of last resort: gold. While it may be difficult for these companies and institution to buy the physical metal on the open market, the smart money will go right to the source and get invested where profits can be maximised, which means going to the miners.

We are in next phase of this bull market in precious metals, and gold and silver will continue to move higher now that printing money to infinity has become official policy. It will be the miners who are still undervalued and have growth potential that will really benefit from this next round of QE and rising gold prices. Expect to hear more stories about investments coming to the mining sector and as this trend grows, so will the attention being paid to the minors. While the ETFs may be a good way to trade the price of metals rising, the leverage and exponential gains will be made with selecting the right mining company. The next leg of this bull market will benefit the miners and they could easily outperform the gold price over the next few years, this is where we see the real gains to be made.

I will be speaking at the Cambridge House Toronto Resource Investment Conference on September 27 and 28, 2012. You may register here to attend the show. I will be presenting a 30 minute workshop on Friday the 28th at 4:00 pm on "Trading Opportunities: Looking for Catalysts and Developing Strategies to Trade Precious Metals Shares". On Thursday morning I will also be a panel speaker alongside Bill Murphy, Chris Powell, and Jay Taylor discussing gold’s diminishing supply and increasing demand.

If you enjoyed reading this article and are interested in protecting your wealth with precious metals, you can receive our free blog by visiting TDV Golden Trader.